Argentina at the Crossroads: Capitalism has Failed - For the Socialist Revolution!

The mobilisations that have developed in Argentina in the last weeks, in particular the uprising of 19-20 December, are without precedent. This is the first time in the long tradition of working class struggle that an elected government has fallen directly and immediately as a result of mass street protests. It was an insurrection that has clearly shown that the whole middle class, as well as the working class, mobilised against the De la Rúa government.

"In scenes reminiscent of the fall of Saigon, the leaders of the government hastily packed their bags and fled by helicopter from the roof of the Presidential palace. Only these were not foreign invaders fleeing from an army of national liberation, but an elected President fleeing from his own people. While the eyes of the world were diverted to the other war in Afghanistan, another war was raging. In the week before Christmas, Argentina was at war. Not a war between nations, but a war between rich and poor, between haves and haves not - a war between the classes." ("Argentina - The Revolution has Begun", By Alan Woods)

The mobilisations that have developed in Argentina in the last weeks, in particular the uprising of 19-20 December, are without precedent. This is the first time in the long tradition of working class struggle that an elected government has fallen directly and immediately as a result of mass street protests. It was an insurrection that has clearly shown that the whole middle class, as well as the working class, mobilised against the De la Rúa government, a government that in its last days had only 4% of the population supporting it. It is a struggle that once again has proved the correctness of the traditional methods of the working class: mass mobilisation, demonstrations, and the general strike.

All the political analysts, the economic press, and main diplomats currently look fearfully to the second most important Latin American country. They grieve over the social and economic effects of the declared Argentine cancer, which is threatening to develop and spread throughout the planet. One cannot, however, understand these events without analysing the recent past.

The 1990s looting of Latin America

This is the best way to describe what has happened in Latin America, burdened with enormous debts (even bigger now than they were 10 years ago). Paying off the debts involves huge attacks on public spending and privatising the entire public sector to the benefit of the multinationals and international creditors.

Airlines, post, utilities, banks, hydrocarbons...all sold at knockdown prices, but whose values have hugely increased since. Many were in terminal crisis and had enormous debts that were borne by the state, which was forced to take out new loans, thus further increasing the enormous debt which, like an enormous black hole, got bigger and bigger, swallowing up everything.

This process affected the whole continent. However Argentina has been affected in a particularly severe manner. Other multinational investments have been made over the last few years in Argentina (and Brazil), such as those in the car, but there was always a condition attached: that the state conceded very generous public grants of equal size. All this was accompanied by reductions in public spending, and attacks on hard-won workers' rights.

The uprisings of the 1990s

Naturally, the workers fought back after the attacks of the military dictatorship. The economic crisis and hyperinflation during the de Alfonsín period, and the policies of Menem of looting the state, pushed by the multinationals and IMF, provoked a rapid increase in unemployment, and the impoverishment of the masses.

Over the past ten years there were semi-insurrectionary movements in different cities and regions that had been affected by these so-called "reconversions" which only caused more unemployment. In 1993, there was the Santiagueñazo, after the mobilisations of June 1996 of the "iqueteros" of Cutral Co. [Note: The movement known as the "piqueteros", that has organised tens of thousands of the most militant sectors of youth and workers, who had been sacked in the 1990s, has played a key role since 1996, and especially over the last year and a half at national level] That movement forced the government to back down in the face of numerous demands. Then again there were uprisings between May and July 1997, in Cutral Co and Tartagal, Jujuy, and Cruz del Eje. During the last years under Menem, there were very radical mobilisations of the public sector and the poorest sectors in Jujuy, Tucumán and Corrientes.

Many of these mobilisations were defensive, and were often very bitter. The fruits of these uprisings were varied, in some cases leading to victories and in others to defeats. But it was an experience for the masses that took part in them. Some were partial victories that strengthened the moral and confidence in the workers' own forces. However, a few months (or in some cases years) later, the gains conceded, or the jobs saved, were taken away again. The policies of adjustment and privatisation provoked more unemployment and misery: what they give with one hand they take away with the other. The enormously radicalised mobilisations, with road blocks, sit-ins in factories and government buildings, had an impact on the conscience of the entire country.

The debt, the dollarisation of the economy, and the recession in Argentina

In order to attract capital and give more guarantees to lenders so as to obtain new credits, the government decided to peg the peso to the US dollar ten years ago. Thus the US dollar has been in daily use in Argentina. This policy led to a situation where most of the credits granted to Argentines were in dollars, as were the credits sought by the government to pay the debt.

In 1998, the devaluation of the currencies of South East Asia, and later Brazil, meant that Argentine exports towards Brazil fell visibly, which was a determining element in explaining the current recession in Argentina, which has lasted for more than 3 years. Entire industries have moved to Brazil, whose government formed a special fund to promote this. This increased even more the current tendency towards commercial war between the two giants. Since 1998, the Brazilian real has depreciated 120% with respect to the dollar (El País, January 8, 2002).

Argentina couldn't devalue the peso, because this meant risking a financial collapse (the majority of the credits are in dollars) and a huge increase in inflation; which is what is now happening. The peso-dollar parity has burdened economic growth while at the same time further deepening the recession.

From the fall of Menem to the revolution of December 2001

In 1999, the Peronists (who had been in power for 10 years) lost the elections to the Alianza, an alliance of the Unión Cívica Radical, and the Frepaso, formed by sectors who had split from the Peronists and social democrats. The coming to power of the new Alliance was based on the discrediting of the Peronists, and on the illusions in the anti-corruption propaganda. However, its President, De La Rúa very rapidly bowed down and accepted his "responsibilities" before the IMF and capitalists, and carried out "structural adjustments" in health, pensions, education and public finance. The response of the workers was unanimous, and all the discontent that had accumulated during the 1990s, that had occasionally led to short outbursts of protests, came together into national general strikes and out and out insurrections in various cities. Over the last year and a half, there have been 7 general strikes against De La Rúa's regime, that provoked, among other things, to the fall of 3 economic ministers, the governor of the Banco de Argentina and the Minister of Labour.

After the resignation in March of two Economic Ministers in two weeks, due to popular protests, the bourgeoisie were conscious that they would have to wait longer before launching an attack on the working class. They preferred to go for a government of national unity with the incorporation of Cavallo as Economic Super-Minister (the same man who introduced currency parity under Menem), and continue governing with the support of a wing of the Peronists for their economic policy, and then they were planning for new elections, after which they would prepare a new budget which would include attacks on public spending for 2002.

At that moment, we pointed out in the pages of El Militante (Spain) that: "The worker's movement would now be ready to move on to the offensive if their leaders had a clear programme. Even a revolutionary situation of open defiance of the bourgeoisie would be in the making, if they were to build workers' committees against the IMF and government plans, in all the factories, in all the colleges and faculties, co-ordinated at local, city and national level." (El Militante, May 2001) All this was confirmed after only a few months, when the masses went well beyond their leaders.

Unfortunately, the union leaders have lagged behind, mobilising the movement only when the pressure from below became very strong. Despite this, whenever and wherever struggles arose, the workers expressed themselves through the traditional unions. For example the struggle at the privatised state airline Aerolíneas Argentinas, when solidarity with those workers captured the imagination of the overwhelming majority of the people, and the slogan of nationalisation won a mass audience, forcing the union leaders to call another general strike.

The elections went badly for the bourgeoisie; the Alianza, lost 5 million votes, the Peronists more than a million; 40% of the electorate abstained (voting is obligatory), or voted for nobody; 25% of the Buenos Aires votes went to the left "anti-system" parties. There was also a clear mobilisation of the working class against the government.

The revolutionary days of 19-20 December

After the elections, the Alianza was finished as a governing body. The situation deteriorated daily. In the North, in the city of General Mosconi, there was an insurrectionary movement during the summer: the governor was thrown out by the people, the same fate awaited the councillors, and other representatives of the local government fled. For some time the piqueteros practically expelled the police from the city, and ruled it. A minister, Cafiero, who tried to act as "fireman", negotiating directly with the protestors, had to admit that "in General Mosconi, there is no state" (La Nación, 24 June). Late, he declared "there isn't one Mosconi, but many potential Mosconis". The concessions given by the state were won by the representatives of the piqueteros, not by the government. The same occurred, to a lesser degree, in Tartagal city.

In September, the II National Assembly of Piquoteros took place, with 1,500 delegates representing 30,000 piqueteros. This organized the most important national road block that had taken place up until then.

In early December, the Alianza finally lost the little middle class support it had retained, when it froze savings and limited monthly bank withdrawals, the so-called "corralito", which hit small savers. The big capitalists had already taken their money elsewhere, withdrawing 24% of the deposits in the previous 6 months, amounting to almost 20,000 million dollars. If Cavallo and De la Rúa hadn't taken this measure, there would have been an immediate financial collapse - something which is still possible today.

The corralito was introduced when it was already clear that monetary parity with the dollar was totally unviable, and that devaluation was inevitable. In fact, the devaluation had been supported long ago by the U.S. administration and the IMF, who looked with fear upon the effects of a future devaluation that nobody would be able to control, a devaluation that would be imposed by the market, i.e. by the international speculators.

Since then, in Neuquén there have been various general strikes that have affected all the province. During these strikes the demand for the nationalisation of the industries in crisis has been raised. Strikes have continued in other sectors, including rail and telephones. In Mar de la Plata, civil servants occupied the regional Bank; the MTA (or rebel CGT union of Hugo Moyano) called a general strike for 13 December, which the other unions were forced to support. The assaults on supermarkets by the urban poor became an irresistible wave, due to the current desperation.

The De la Rúa government was totally powerless. It enforced a state of siege, believing that this would find an echo among the middle classes, and that these would demand "order". But the immense majority of these had already been won over by the "disorder". There were a few isolated elements that opposed those entering their shops. However, what stands out about the middle class is how it mobilised. On the 19-20 December, huge columns from the petty-bourgeoisie areas converged on Plaza de Mayo to join with the tens of thousands of workers there. They also joined the workers in ferociously opposing the police when these tried to remove them on the 20th. The people demanded the default of the external debt, the resignation of Cavallo and De la Rúa, the expulsion of all the leaders of the Radical and Peronist parties, and for jobs.

The isolation of the government and the MPs from the people that they were supposed to represent wasn't merely a political isolation, but a physical one. A journalist explained from inside the Congress, "we're locked in here. The legislators can't leave, and nobody can get in" (The Guardian, December 21, 2001)

The repression was tremendous; 35 killed, hundreds wounded, 4,500 arrested. Duhalde declared that the country was on the edge of a civil war. He wasn't far wrong. The Peronistas sacrificed De la Rúa, ignoring him as he tried to set up a government of national unity with them. It needed a scapegoat to calm the fury of the masses and with the 4% of popular support that he had, De la Rúa was the best candidate. The Peronist leadership, the majority of whose MPs had supported all the fundamental economic policies of De la Rúa over the previous 2 years, including the special powers for Cavallo, promptly abandoned him.

After the 20th of December

Since the resignation of De la Rúa, confusion reigns. The Peronists, who have the majority in the Congress and Senate, took the initiative, with the different "families" fighting for power, more divided than ever feeling the pressure from below, and at the same time anxious for power and prestige. According to the Constitution, the post of President passes to the President of the Congress, but he didn't get the necessary support. There was talk of the need for "new faces" that could present themselves to the masses with certain guarantees; this from the political class that is one of the most hated on the planet.

They chose Rodríguez Saá, governor of a small province, and who promised before all the other Peronist "family chiefs" that he would step down in a few months, when presidential elections would be called. Once in charge, he planned to stay there longer than agreed. He started promising the extradition of military torturers of the dictatorship (one of the demands of the demonstrators). However, he rapidly started to lose all credibility when he sanctioned the "corralito". He also started to pay the foreign debt, but once it became clear that he had no money left, Argentina finally defaulted, as everybody had expected. This is the biggest default in history: 132 billion dollars, and it will effect all the other indebted countries, and all the so-called emerging nations.

He later promised, (each promise visibly more demagogic than the last) that "Argentina won't pay a centavo of the debt until all Argentines have a job" (El País, December 23, 2001), to raise the minimum salary to 500 dollars and to create a million jobs - in a month(!), without saying how. To finance all these impossible promises, he proposed to immediately launch a new currency, the argentino, a currency that depreciated by 50% the following day even before coming into circulation, as it wasn't backed by any real value, and which would have pushed Argentina into an immediate inflationary spiral. Without a programme, without a base inside the party, clearly paralysed, and with the bosses alarmed by his demagogy, his government fell after the mass mobilisation of the "cacerolada" (people banging pots and pans in the streets) of 28th of December, with people shouting "All of them out". The last straw that caused the mobilisation of the 28th of December paradoxically came from the Supreme Court, when it backed the corralito law. The people's indignation wasn't aimed only towards the government, but also at the police, as they had discovered various secret murders by the police, and also against the Supreme Court, and those judges appointed in the Menem epoch who had sanctioned all policies since then. In fact, today, 70% of Argentines agree that all the members of the Supreme Court should resign (Página 12, January 9, 2002).

A demonstrator from the cacerolada that brought down Rodriguez Saá, summed up the general feeling of those taking part. "This town doesn't want a change of puppets, but a complete change. With the people on the streets, there are guarantees that they will respect the popular wish. We have to show this government that we will be breathing down their necks." (El País, December 30, 2001)

The popular assemblies

The cacerolada of December 28 had been called by the 'asambleas populares' (popular assemblies) that formed more or less spontaneously in the neighbourhoods of Buenos Aires. But what do we mean by "spontaneous"? As I said, the mobilisations of 19-20 December "didn't fall from the clear blue sky", but were born out of a tradition of struggles of the many experiences over the last years. The movement of 'asambleas populares' or strike co-ordination committees of the last few months and years, had become a point of reference for a sector of the most advanced activists.

The masses come out on the streets to try solve their problems when they've arrived at the conclusion that all is rotten, and they have to do "something", and that they cannot let others solve things for them. A resident of the capital's San Cristóbal district declared: "In the last weeks, we did things that we never thought of doing, and we still don't know what else we'll have to do" (Página 12, January 6, 2002). In the densely populated La Boca district, another person said "We are making a weekly revolution and what we see is that more people are joining. But the most [important] is that the majority ask what can we do, how can we get involved, how can we help?. Until recently, this had never happened."

The assemblies that are being formed, getting stronger and taking the lead in Buenos Aires and other cities, are being led by the most militant elements, left activists, piqueteros, union activists... But if the masses had not already drawn their own conclusions these activists wouldn't have the influence they are now having. In fact, the new governor of Buenos Aires has stated that he is looking at the possibility of incorporating the representatives of the neighbourhood assemblies into the so-called 'commissions' that the he is planning to set up to distribute the promised aid. This shows the importance that these 'asambleas' have acquired.

What is clear is that these assemblies are consolidating themselves and coordinating with others. So, in the San Cristóbal district, a group of members from a nearby parish organised an assembly in the church, handing out leaflets. 150 attended, fully representative of the are: a bar owner, nearby hospital workers, students, housewives, unemployed, some left militants...the 3 ideas that unite them are: 1) We don't trust the politicians, but we need political action; 2) Those outside (Parliament, government, judges) don't represent us; 3) The most important thing is to maintain the street mobilisations.

The same is repeated in other districts, in Villa Crespo, en La Boca, Floresta. Another resident, an old Peronist activist, said "We arm ourselves with a telephone line. We aren't in contact only with people locally, but also with others from Paternal, Warnes, Palermo." Others declared that they want "true neighbourhood councillors chosen from those organising the cacerolada."

This clearly demonstrates that the slogan for the election of representatives or committees from among the Assemblies, co-ordinated at city, and at national level, would completely connect NOW, with the concrete experience of the masses, not only with a few activists, but with tens, hundreds of thousands of people. In Floresta, where the police killed 3 youths in the protests

"the local residents have taken charge of protecting the witnesses. Their assemblies are so large that they have to use a megaphone for all to be able to hear. They come from other districts, as delegates; and these later report back to their own local assemblies. In the last one, there were people from Mataderos, Liniers, Paternal, Villa del Parque y Flores." (Página 12, January 6, 2002.)

This is the real power that has to be fought for at present: to strengthen and create assemblies and committees in all the factories, colleges and schools, where all the people that have been affected by the crisis can participate together - workers, students, small businesses - and to co-ordinate these into a national congress or Assembly of elected delegates from these committees. This would offer an alternative to the bourgeois institutions of power, to pass over to a government of the workers and oppressed masses. Only such a government would be able to carry out policies that could solve the problems of the immense majority of the people, initiating the socialist transformation of Argentina. It is necessary to defend a programme of action that satisfies the immediate needs of the people, linking it to a plan of measures that finish with the catastrophe created by capitalist chaos, and set up the democratic and socialist planning of the economy, in favour of the majority:

A general strike against the anti-working class measures of Duhalde

No to payment of the foreign debt.

A minimum salary that covers the basic cost of living; about 600 dollars.

A sliding scale of prices and wages to combat inflation.

Not a single sacking. Nationalisation under worker's control of the companies in crisis, to guarantee all jobs.

Immediate reduction of the working week, without wage cuts, to share out the work.

Nationalisation of the banks, without compensation except in cases of proven need.

Nationalisation under worker's control of the monopolies, large landowners, and the main national companies to establish a national plan of production. Expropriation of the oligarchy.

Power to the workers' assemblies and the rest of the oppressed sections of society.

For the defence of the people against police violence. And to neutralise any attempted coup: for the formation of democratic committees of soldiers, and the organisation of groups of worker's self-defence.

For international solidarity of the working class of all the world with the Argentine revolution.

It is necessary to win the majority of the population to this programme. A genuine marxist organisation would have to aim its agitation also towards the base of the Peronist union movement, which continues to represent the decisive sector of the working class. In order to do this work and to win the majority, what is required is to avoid sectarianism and any prejudices.

Duhalde's government won't solve the problems of the vast majority. The Justicialistas (Peronist) leaders and radicals have taken turns in holding power for the last 20 years, and haven't solved any of the workers' problems. In fact, as we explained, the Peronist leaders have supported the main economic measures of De la Rúa over the last 2 years.

Two Presidents removed by mass mobilisation in one week are enough! We can be sure that what Duhalde said to the bosses was: "my friends, support me, or you else go [down] with me." The government of national unity of Duhalde (incorporating ex-Alianza leaders) was formed as a government of the nationalist industrial-bourgeoisie that is seeking to re-establish its rate of profit and the competitivity of Argentine goods. Duhalde has opted to devalue the currency by around 30% with respect to the dollar, and is asking/forcing a sector of the privatised companies to pay for a part of the crisis. What can he offer the masses? The IMF demanded a clear plan of attacks on public spending, as a condition for new credits, which would be like throwing petrol on the fire. The worst is that these methods have already provoked an extraordinary increase in the prices of basic products.

The way out of the recession is going to be very complicated, given that the economic cycle in the main capitalist countries is downward, which will seriously affect an economy, like Argentina's, which is based mainly on exporting raw materials. Investment, which is the essential element under capitalism for development of the economy, is in very strong decline. Who will invest in this scenario? Perhaps the patriotic Argentine bourgeoisie? The verbal patriotism of the Argentine bourgeoisie is large, but much greater still is their love of money. In fact, in the last 10 years, the flight of currency has doubled, as the table shows:

We can safely bet that little of this money will return to Argentina in the next few months.

Who will invest least in this context, will be the birds of prey of the multinationals, who benefited mostly from the privatisations in all of Latin America, and now fear they'll have to pay for a small part of the crisis. The Argentine bourgeoisie will try to use the foreign market to get out of the crisis, increasing exports at the cost of its neighbouring countries. But a recourse to continuous devaluations, that will also be used by neighbouring countries, will provoke a general economic destabilisation.

There are now (officially) 20% unemployed, life expectation has stagnated for the last 20 years, and 16 million Argentines are poor, in a population of 36 million. Capitalism, now more than ever, cannot offer anything to the Argentine masses, neither in Latin America, nor in the entire world. The population has mobilised against the foreign debt and the power of the multinationals and banks. They saw for months how the flight of thousands of millions of dollars of the most powerful was permitted, whilst the small savers had their accounts frozen. Millions of the middle class have been "proletarianised", and they now have the experience of the past year. They stopped various attacks of the government on their past social conquests, and they threw out three Economy Ministers, the President of the National Bank, the Minister of Labour and two governments. There is a future for Argentina, not under capitalism, but fighting for socialism, for workers' power. The events in Argentina will have immediate consequences in all of Latin America, and throughout the whole world. Latin America is becoming "red".